The past few months have seen multiple proposals for averting the looming long-term care (LTC) crisis. Among them was an innovative bill introduced in Hawaii’s state legislature to help state residents pay for LTC. Under that proposal, taxpayers who had filed Hawaii tax returns for at least 10 years would be eligible for a $70 daily benefit for up to 365 days to help offset care costs. Taxes on tourists were projected to fund about one-third of the benefit’s cost, and several news articles touted the bill as a potential national model that other states could adopt.
Unfortunately for the bill’s supporters, the state Senate’s Ways and Means Committee decided on Feb. 29 to defer the bill indefinitely, a move that effectively killed it. According to a report on the Honolulu Civil Beat news site, the bill’s sponsors now plan to focus on getting a similar version of the bill passed by the House Finance Committee.
The Bipartisan Policy Center, a Washington, D.C.-based think tank, published its initial recommendations for LTC financing in February.
One set of recommendations focused on increasing the affordability and availability of private LTC insurance (LTCI) and proposed:
- For the roughly half of Americans aged 65 and over who will experience a high level of need for long-term services and support (LTSS), establish a lower-cost, limited-benefit private LTCI product, called “retirement LTCI,” which would also be more sustainable for carriers than traditional products.
- This lower-cost product would be designed to cover two to four years of benefits after a cash deductible or waiting period were met. The product would also include coinsurance.
- To make these policies more affordable and encourage Americans to plan for LTSS needs while they save for retirement, employees would be able to use funds in retirement accounts to pay retirement LTCI premiums. Early withdrawals would be penalty-free.
- To efficiently expand coverage, recommendations include providing incentives for employers to offer retirement LTCI on an opt-out basis through workplace retirement plans and permitting the sale of retirement LTCI through state and federal insurance marketplaces.